Allen v. City of Omaha

286 N.W. 916, 136 Neb. 620, 1939 Neb. LEXIS 133
CourtNebraska Supreme Court
DecidedJuly 11, 1939
DocketNo. 30545
StatusPublished
Cited by25 cases

This text of 286 N.W. 916 (Allen v. City of Omaha) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allen v. City of Omaha, 286 N.W. 916, 136 Neb. 620, 1939 Neb. LEXIS 133 (Neb. 1939).

Opinion

Carter, J.

This is an action against the city of Omaha to recover the amounts due the police relief and pension fund of the city under the provisions of section 14-610, Comp. St. 1929. [622]*622The action was commenced by three retired police officers now on pension as beneficiaries of the fund. A petition in intervention was filed by the members of the city council in their capacity as trustees of the police relief and pension fund. The trial court entered a judgment against the city for $466,058.84, allowed an attorneys’ fee of $46,605.88, and dismissed the petition in intervention. From this judgment the defendant and interveners appeal.

Since 1909 the statutes of Nebraska have provided for a police relief and pension fund and designated the sources of revenue to maintain the fund. Laws 1909, ch. 15. In the original act it was provided, among other things, that “all moneys, pay, compensation or salary, or any part thereof, forfeited, deducted or withheld from any member or members of the police force for or on account of absence for any cause, lost or sick time, suspension, sickness or other disability, physical or mental, * * * and all moneys realized, derived or secured from the sale of any condemned, unfit or unserviceable personal property belonging to or in the possession or under the control of the police department, after deducting all expenses incident thereto,” should be set apart for the benefit of the fund. These provisions are still in force and now appear in section 14-610, Comp. St. 1929.

It was stipulated by the parties that since July 1, 1909, lost and withheld pay in the amount of $264,675.38 has been wrongfully retained in the general fund of the city, and that unfit and unserviceable automobiles of the value of $63,-334.83 have been sold and not credited to the fund. It was further stipulated that, if said amounts had been timely credited, the sum of $138,048.63 would have been earned by their investment. The total sum of these items constitutes the amount of the judgment entered against the city of Omaha.

This appeal raises four questions for our consideration: (1) Were the plaintiffs proper parties to bring this suit? (2) Did the court have the power to allow an attorney’s fee payable out of the funds recovered? (3) If so, was the [623]*623amount of the attorneys’ fee excessive? (4) Was the petition in intervention properly dismissed? We will devote ourselves to these questions in the order designated.

By express terms, section 14-612, Comp. St. 1929, makes the members of the city council the board of trustees of the police relief and pension fund. The plaintiffs, and others similarly situated, were unquestionably beneficiaries of the fund. A trust relationship therefore existed. The defendant contends, however, that payments made from the fund are on general obligations of the city and will have to be paid whether the fund is strictly maintained as provided by the statute, or not. It is upon this premise that defendant bases his argument that plaintiffs, as retired police officers, are not prejudiced by the failure of the city to make the payments for which suit was brought, and therefore they are not proper parties. While it is true that a policeman’s pension is classified as a part of his compensation and not a gratuity, and for which a city is ultimately liable, this is not a controlling factor in determining whether a beneficiary under the pension fund may maintain a suit for himself, and others similarly situated, to preserve or augment the fund. The statute does not provide for a general levy by taxation as a means of raising the revenue necessary to carry out the purposes of the law. The fund' is made up from moneys received from and through certain operations of the police department, and while under the holdings of this court the city is liable for pension payments where the rights thereto have vested, whether the funds have been thus provided or not, the beneficiaries will not be relegated to the single remedy of suing for their pension payments. While the city is ultimately liable, the plaintiffs as beneficiaries of the trust are proper parties to invoke the power of the courts to compel compliance with the statute creating the fund. To require the beneficiaries of the fund to wait until the money was exhausted, and then limit them to a suit at law to enforce their individual rights, does not afford the only remedy. Demands were made upon the board of trustees of the fund, demanding that they take steps to enforce [624]*624compliance with the statute without result. Under such circumstances, the plaintiffs have sufficient interest to maintain a representative suit on behalf of all the beneficiaries of the fund.

It is urged that this is not a proper case for the allowance of an attorneys’ fee out of the fund recovered. The applicable rule is as follows: Where the services of a litigant’s attorney result in rescuing or preserving a large amount of property or funds, not only for the benefit of the particular litigant, but for the benefit of all others in the same class, and by means of these services the property or -funds are conserved for the benefit of all, the cost thereof, including attorney’s fees, should be borne by those benefited by it. Trustees v. Greenough, 105 U. S. 527, 26 L. Ed. 1157; Blacker v. Kitchen Bros. Hotel Co., 133 Neb. 66, 273 N. W. 836; In re Estate of Creighton, 93 Neb. 90, 139 N. W. 827. Clearly, in the case at bar, all of the beneficiaries of the police relief and pension fund were benefited by the litigation carried on by these plaintiffs. The application of equitable principles requires that all beneficiaries should contribute their due proportion of the expense. The most equitable way of securing such contribution is to make the expenses a charge on the fund.

It is further contended that the fund in question was a public fund and could not for that reason be subjected to the payment of an attorneys’ fee. The rule contended for by defendant and interveners is well stated in Wood v. State, 125 Ind. 219, 25 N. E. 190, as follows: “The law will not permit the administration of governmental affairs to be embarrassed by the seizure of public property, or public funds, to pay debts due individuals. * * * This settled rule rests upon considerations of public policy, and it is its object to prevent embarrassment in governmental affairs, and not to protect or assist public officers. It is difficult to conceive a case where there is stronger reason for the rule than one, such as this, where a public officer seeks to embarrass the collection of the public revenues by tying up money due a governmental subdivision by asserting a lien.” [625]*625While we agree with the principle announced therein, we do not believe that it controls the decision in the case before us.

An authoritative text in discussing the subject of public funds says: "The term 'public funds’ means funds belonging to the state or to any county or political subdivision of the state; more specifically taxes, customs, moneys, etc., raised by the operation of some general law, and appropriated by the government to the discharge of its obligations, or for some public or governmental purpose; and in this sense it applies to the funds of every political division of the state wherein taxes are levied for public purposes. The term does not apply to special funds, which are collected or voluntarily contributed for the sole benefit of the contributors, and of which the state is merely the custodian.”' 50 C. J. 854.

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Bluebook (online)
286 N.W. 916, 136 Neb. 620, 1939 Neb. LEXIS 133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allen-v-city-of-omaha-neb-1939.